Can an auto loan contract be revoked after the purchaser already has the vehicle?

UPDATED: Jun 1, 2011

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Can an auto loan contract be revoked after the purchaser already has the vehicle?

I purchased a vehicle 5 days ago. All paperwork was signed. Then 3 days later the dealership phoned stating they needed more money down for the purchase or I could pick another vehicle. The reason they gave was that the lender didn’t feel comfortable with the deal. Can the bank do that? Can I keep the vehicle? 

Asked on June 1, 2011 under General Practice, North Carolina


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

When an auto lender is involved in the purchase of a car, a dealerships has 2 methods of letting a buyer drive away with the vehicle that same day: (1) either the purchaserer has already been approved or is approved on the spot; or (2) the purchaser signs a document allowing them to take possession of the vehicle with the understanding that they must immediately return it if financing is not obtained (i.e. your continued possession is contingent upon loan approval). 

Without seeing the paperwork that you signed its hard to say for sure. Yet it appears that you were apparently approved for a loan and got the vehicle but now the lender has thinks that it may have made a bad deal and has gotten cold feet.  This why they want additional money down. However the lender cannot now ask you to bring additional monies to the table. There several issues relating to the law (contractual and equitable) that are potentially involved here such as anticipatory breach and detrimental reliance.  You should immediately contact your state's banking department or attorney general and file a complaint. 

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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